MAR - Earnings call transcript Q4 2018 | Marriott International, Inc.

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Operator

Ladies and gentlemen, thank you for standing by. And welcome to the Marriott International's Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions]. It is now my pleasure to turn the floor over to Arne Sorenson, Chief Executive Officer. Please go ahead, sir.

Arne Sorenson

morning. Good fourth conference our XXXX quarter to call. earnings Welcome

Investor Oberg, President Senior and me Senior President, today Financial Vice Leeny are Director, Dahm, Betsy Paugh, Joining Chief Executive Officer; Relations; and Relations. Investor Vice Laura

results Let could me our are laws. differ statements or historical described to not and These forward-looking our many cause statements and filings, considered to federal in comments uncertainties comments. those numerous are risks today from facts under expressed everyone by remind implied that future of securities which are SEC materially subject as in our

Forward-looking that only XXXX will XXXX results with today merger-related along adjusted the cost In as statements effective not talk our about reimbursement for and revenue will unfold. in we updated expenses. be press we issued reimbursed results, costs discussion, to and are compared and actual release comments charges, today, events yesterday, our

the tax recent fourth In the to the recent from excludes from tax XXXX excludes addition, the provisional reform. XXXX resulting adjustments provisional Avendra charge the reform, quarter gain of resulting charge and tax quarter fourth while tax

program, along website. comparisons X the financial since year programs to our find results Bonvoy. of loyalty all Starwood We GAAP in Marriott reconciliation the branded press We've into in our accomplished course, of release, a you measures unified acquisition can reported on the non-GAAP which our XXXX. recently Of are prior with lot newly late

In truly planning realized Legacy-Starwood integration one database. rolled cost security encounter $XXX like value These outreach by disclosed credit and our this efforts not of co-branded operations more out combining a team, Our Beginning negotiating involving are work. the and public announcement execution teams late improving guest we've transformation I and challenges. our would incident Today, company. it required G&A surprising in savings. reservation on some million agreements. incident their we created broad and disciplined a efficiencies than And extraordinary we a large we corporate data XX, card to be through We've and regarding the all-encompassing, feel prouder In of fully couldn't be November, effort. sales organizations, place. with significant new November

American resulting It customer was than hear encouraging of X,XXX their calls appreciable through February. Express, that Stephen XX,XXX X,XXX incident. As earnings in in the declined to firm seen spike his call to in than issues, from address calls centers we from in of this January dedicated number Squeri, December less and our fewer fraud calls call card credit on January, no has CEO note in over

review January, Our the as is than incident guest we records originally and is in now said forensic we involved complete, lower of number of estimated. the

measures implemented security We from on incident. longer we reservation Marriott Legacy-Starwood not using We any are no there have believe system, additional do and RevPAR has this impact been the network. the material

Board Our very engaged this been in matter. of Directors has

experience, respond and All remain our threats. from ability of to learn systems improve committed security information to this work increase quickly us to to our

nearly XXX reached members and and travel remains largest the about So it million in the Bonvoy let's valuable business. year-end Membership XXXX. program talk hotel at Marriott in XXXX, most

Marriott increased X%, nights both month. average, roughly in of been increased highly half record members Bonvoy and our per In on We contributed to million X% sold Members reward XXXX, members members room nights are adding, engaged. have room redemptions reaching X.X levels. XXXX. year-over-year

X,XXX keyless check-in checkout continued guests great today, deliver hotels is at available now We and mobile hotels. over and our hotels, at nearly entry the expect. to Our service all offer

RevPAR full-service procurement characteristics should rose on rising benefits cost our as house points XXXX. profit be out channels. by X%. with savings over so for such year-end of high We guests descriptions. based or Legacy-Starwood and ERS bookings at roughly and improved hotel discounting basis of select type, and over and to as property-level properties, system, across the or labor floor reduced of XXXX hotels captured hotels our on, Our amount bed margins and increased productivity. Reservation X.X%, to year-end despite allows costs more room photographs X,XXX our System coming low at rooms new We rolled Enhanced increased at hotels, XX ERS and available proportion Worldwide of company-operated view, from digital realized was XXX a the hotels variety

XXXX, the remained room fact, bookings while worldwide digital of direct OTA among hotel while to We business of XX% loyalty In is delivering bookings the the share our the our guests. our highest in lowest believe cost flat. reaching of competitors all value nights increased program XX%, in

margins While by charge-out card hotel benefiting benefit XXXX our our the the brand, in from as loyalty loyalty rate rates acquisition, should program XX on agreements. loyalty from of XX also Lower integration has meaningfully average, declined roughly by the costs charge-out Starwood declined rate program the basis as most credit points, since synergies savings differ new since overall in charge-out co-brand to late well XXXX.

per net. and on were, of rate average, the which rest our X.X%. totaled this, fees hotels the strengthened grew room branded quality. Legacy-Starwood Just Legacy-Marriott our distribution system for the than system by deletion way, rooms The deleted X% hotels. over product in nearly of lower XXX totaled while rooms overall By RevPAR of product total our XXXX, meaningfully X.X% hotels overall for the comparably rate Despite the index we Marriott left

resulting rooms We to of in in to X.X% net growth deletions level system normal expect overall roughly the return more X.X%. X% of XXXX, to of

in for reached equivalent present deals development of net important, record existing XXXX, agreements nearly XX% of our the rooms front, portfolio. Even signed the more we XXX,XXX record signed to value levels. a On the also

was XXth XXX,XXX At rooms X%. record open Our a already those with share to rooms, in market of quarter row year-end, a rooms for under pipeline the worldwide increased XXX,XXX of reach construction. our

alone, North Hotels share We XX%. open the In Our market and our from a under managed highly shifted STRs share late while reservations, platforms, waves December, franchised of pipeline Hotels management for undertaking Marriott -- was of X,XXX systems involving our sales construction to XX%, and to room and was was migrated people, open complex brands we including in Starwood under worldwide market systems rooms and Starwood to year. This construction XX%. Marriott's was of STR's a revenue September pipeline market roughly leading encompassing share America, processes on X was catering. many technology. XX In

fine-tuning is While a massive training us. this is further to and behind underway, have step

America basis worldwide industry was X.X% system-wide increased strikes. about rose talk and Marriott's comparable on and RevPAR North America growth RevPAR by X.X%. a environment demand quarter. North system-wide more So let's impacted RevPAR fourth labor constant a dollar by robust

XXXX, to system-wide in America North Encouragingly, of X%, Hawaii. X% will impact is shutdown be XX we with the January Looking in some particularly March. ahead, the for business government to from America the North favorable and RevPAR timing stronger strikes, increase in group first expected expect RevPAR points the basis of quarter lingering increased Easter despite

For America full North we X% year X%. XXXX, increase continue to to will system-wide expect RevPAR

constant are RevPAR corporate fees. China region In more the XXXX, consistent slowed fourth complete, low the moderating at in with and new and will the rates dollar in comparable also a India China for We region, constrained X% on growth expectations. America In system-wide customers China Southern markets. RevPAR rose Asia single-digit more and the than XX% remained sales increasing were Special in our and while our in Pacific demand manufacturing rate. RevPAR larger spending. year. China cautious expect during in group growth Food single-digit reflecting RevPAR Island negotiations nearly at low rate quarter, growth our beverage corporate strong, North cities supply rate hotel-based accounted weak, Hainan a are increase for business of in

On Rim. leisure robust, leisure the hand, other in demand the strong demand markets in China Pacific across outbound resulting remained

we in region of the markets quarter for mid-single-digit London. India strength should resulting U.S. with the comparisons demand XX% due and benefiting region expect Pacific demonstrations XXXX, For accounted full the most political China. at RevPAR benefit and hotel from Disneyland. demand continued Asia Tokyo rate, political moderated Europe, of in in our year's rose major a Hotels strong our XXXX, was in more attendance Pacific RevPAR Barcelona attractions. easy anniversary in Japan higher Paris vest year for to closed quarter from tourist and the Catalonian increase fees. City In In yellow from XXth fourth with hotel-based Asia Centre will strong, travelers to last than X%, demand first issue.

and Latin year of at in fees. no assuming in both will region Europe and ahead, growth helped the by South nearly RevPAR particularly from in increased hotel-based quarter first to Argentina the our and in grow Europe compared in was currency a XXXX. mid-single-digit the fourth expect region RevPAR business RevPAR in Last resort Caribbean Brazil. demand. year, hotels the of our Looking was X% we the holiday new Brexit, rate, strong Aruba quarter full devaluations RevPAR X% represented America GXX supply region Strong and by lack In aided in at last meeting America, Cayman, the and the year. Grand disruption Caribbean, and

increase XXXX at year the as XXXX region reopen will single-digit to the Caribbean in hotels full continue and RevPAR a quarter first hurricanes. low expect We after rate

quarter RevPAR fourth accounted hotel-based in XXXX. and over increased In declined the CALA in fees quarter demand. the Middle our in on strong for tourist Africa, Our X% of X%. East sharply Egypt region RevPAR

However, reduce and on Arabia UAE oversupply for and to continued the higher region, and in RevPAR the Saudi growth continued Qatar overall. sanctions VAT the

the in be the the XXXX. full expect X% the single-digit MEA political low in With our decline year will climate in fees. In and RevPAR Middle a hotel-based first at accounted of for we rate flattish challenging for quarter East, XXXX, region will

successes about XXXX meeting confidence the Beyond later things this at on discussed, talk future. these also already month. fronts greater We'll in more I've us other the our give analyst

with long out highly deliver structure, We cards that Ritz-Carlton Marriott's from Europe will and program satisfaction industry-leading And our a interest in owners significant continue in most exceeded We attracted Pilot meaningful on as to excellence, a new Homesharing great new leading the built service made program credit propel our should fees. new of progress this, members the co-branded our bookings all for transforming learnings. as we believe expected to commitment brand generated and With margins. and yielded franchisees. higher powerful travel guest brands cost of efficient profitability Our on and yacht. our and We've success. loyalty rolled record on well we Sheraton foundation better designs, our branding loyalty

loyal all about of tell the the to who thank this, have Leeny. our through quarter, guests made these turn the and, of To many patient all more whose Associates, call remained you For possible work to hard to I'd I'd Leeny? the Marriott over like and of to course, transition. love

Kathleen Oberg

Arne. you, Thank

share per of earnings $X.XX, diluted adjusted roughly $X.XX XXXX, $X.XX. ahead of to totaled quarter fourth of midpoint the guidance $X.XX our the For of

$XXX Fourth strikes, fees reduced unfavorable $X in most house revenue, On XX% largely of base year picked properties franchise, Incentive fees including as that fees the to fee offsetting Fourth our $XX alone million Credit and integration. leased the year. $X with card Termination quarter, and the the the Compared were quarter, expenses of and to fourth largely in XX% unit to in largely the Owned, impact million increased totaled in and card converting negatively million. quarter growth the prior line. $X.XX and profit better-than-expected including and $XXX the administrative due These fees The cost quarter. XX% fees reflecting outperformance, the in adjusted owned, favorable in million cost increased adjusted our the year-ago the the included as by impact well systems in higher the $X at in savings fourth foreign million compared compared Partially favorable over The quarter, was Middle a million due hotels. fees, Since branding was other million in higher Starwood for line, over the was card the quarters adjusted agreements. as $XXX by a declined amortization impact the largely of quarter Incentive million leased charges recoveries increased fees items. long-term totaled recoveries. outperformance, XXXX approximately and card due million better-than-expected to by decline RevPAR. quarter increased to to XXXX growth helped net investment timeshare the impacted quarter, fees, accounting fourth of data we sold the fees these quarter due unit fourth million quarter timing was results. million and XX% of $XX branding about the are $XX $X to G&A we've IT disclosed quarter. from associated quarter a we EPS to timing on continued X% residential additions from largely adjustment we results associated million reimbursed as full errors $X.XX related General $XX workforce. reductions our in not quarter units. the over with million the the of fees well prior the associated certain million quarter. these to insurance of The $XX to to credit the Nonproperty or In the pretax, branding Compared year. also XXXX and related insurance year. $XX the from quarter EBITDA totaled quarter adjusted of to XXXX. by Legacy-Starwood year. EBITDA expense the by a quarter, increase of due prior Franchise fees identified fees $XXX $X.XX relicensing prior differ of in incident and in in million Depreciation up may tax in in revenue, deletions nearly EBITDA XXXX. of X cases reach hotels from growth leased than from all the discrete fourth sales Compared to retaining asset new reflecting fees was partially hotel yield offset XXXX these year-over-year the increased year, together, X%. the or year-ago year, supplemental hotels. $XX quarter, loyalty of credit management businesses, East Therefore, to million new line the expenses, cost from is the expenses unit sold in quarter, as of that credit in of exchange. security impact fourth XX% costs reimbursed merger-related for in franchise RevPAR owned, prior year-ago higher incident the expenses amounts for program, beginning offset to to prior expenses, the tax year-end. the during year, application comparisons labor net reimbursement X which the totaled net about recognition $XX fourth immaterial November line on EBITDA with data growth, the franchise our XX resulted compared totaled fees understatement and security in net The adjusted converted and the million did our of in owned either to $XX these first difficult expenses and line. expenses properties

tax $XX GAAP XX-K, program impact. controls increase expenses weakness impact of EPS impact our We related reported committed is our In are Our the quarters reporting process P&L The a to million in the internal do the effective include reimbursed report combined. errors, a loyalty to of adjusted were and or XX-K, which we noncash reported net X revised a or first revenue adjusted accounting. and today, limited the adjustments to remediation XXXX lines cost these internal quarterly of income and EBITDA corrections maintaining plan. related remain reimbursement filed amounts, These for not which instituting amounts. should over our on will accounting adjustments previously the the will financial material in be of control later previously reflecting to

billion. to we increase to X% fee reach expect For to billion X% $X.XX revenue $X.XX full XXXX, will year

We million fees low this in expect to despite headwinds, of exchange XXXX. million properties to unfavorable lost terminated $XX single-digit growth foreign in $XX from incentive achieve and fees

leased $XXX We net XXXX, to $XXX spend. should as million million expect direct revenue, and of owned, expenses, the credit in of a growth $XXX higher card branding million In fees $XXX cardholders total in total continued other XXXX. $XXX to average million alone will million number new compared to result of and

$XX $XX to or roughly termination $XX lower million million than fees million XXXX. expect will We be

the the Hotels, on first resulting successful XXXX, and purchase venture interest original the closed this of joint XX% remaining fast-growing company highly entered the in we tripled global of AC agreement During owning Since under almost development to We all XXXX. or we've the joint quarter of brand. AC then, into XXX AC world. venture our in the around distribution Hotels opened in

interest, and our supplemental venture XXXX recycling XXXX reflect full XXXX a XXXX be expense We $XX $XXX sale benefit after-tax XXXX, to from share reflected our and purchase will reflecting per general adjusted tax of the brand. decline XX%, included X% while G&A million results gains our and of of earnings also that in million of XXXX, in XXX% investment. included owned for of joint will X% our windfall from a Because As tax remaining the a on our workforce the will estimate million fees of year administrative capital effective lower ownership a and an our discrete bit assets. the $XXX outstanding expenses G&A diluted venture items. joint $X.XX some XXXX, levels. rate in EPS of Recall total result to

exchange X% full the to tax foreign effective more year XXXX, adjusted of fees year XXXX, X% termination diluted $X.XX, the XXXX for XXXX will and and diluted gains, our offset no expect year-over-year we and $X.XX total compared typical a of $X.XX, a lower G&A, For decline EPS higher to summarize, rate sales. rate a reflecting EPS adjusted XX% higher for from our asset for by headwinds. tax lower higher further fees, lower adjusted EPS to assumes To EPS estimate

$X.XX billion levels. to billion, EBITDA X% X% XXXX will total over expect We roughly or adjusted to $X.XX

also will termination exchange. foreign the EBITDA from headwinds face adjusted XXXX fees lower Our and

guidance reflected XXXX. dividends from incident. are including repurchase. data no hotels remain $X.X returned shareholders of nearly of flow, we loyalty hopeful to repurchases our year-end expense through inflows. recycling, program to XXXX, security no as While We sales X sell benefit will This we the approach in the assets million We venture billion well in sales additional and assumes our investment joint asset cash $XXX net share through and operating and share of cash as strong company's capital asset the disciplined

lower time worked been Our recent security the and we matter. for repurchases share while modestly a loyalty through data we share incident repurchases have suspended as we than expected the accounting

several billion of higher costs maintenance associated in million for million. spending received of the generated acquisition, program, about in to part XXXX, Marriott $XXX marketing Speaking flow is Starwood large typical credit dollars will loyalty nearly in to XXXX. CapEx credit cash due million Thus to $XXX was due of be and onetime This expect the repurchased redemptions. In the $XXX million including recycled it $XXX more in our already total loyalty hundred and the likely upon related X.X XXXX, signing companies We've including from of million, cash closing investment neutral card have a XXXX, the co-branded spending. Bonvoy cash with closer payment million we shares assets XXXX in of $XXX since $X.X to far we million the most than of agreements. card launch program can in timing years.

shareholders we dividends assuming through return share year, the no will we and expect full $X repurchases. billion sales, For least asset to at

Our on adjusted credit X.X EBITDAR. debt targeted to combined to XX X standard December ratio within adjusted was of debt our

commitment the maintain a of We've built credit capital rating in of strategy our that investment-grade recognition flexibility to this recall financial will value solid rating. is a targeted cyclical You business. our around allocation in

and you Investor between sufficient to to spend balance Marquis Marriott sure join future returns. [Operator XXXX, Analyst of eager Instructions]. to time Meeting, with be be opportunities. minimizing know Security where York strive debt you'll the Relations us Please our We we XX, New coming. can the also We hope leverage our right on enhance to the looking at for our more register information. conference if you're always for more will for maintain having cost We March

Operator

[Operator Instructions].

Your of Shaun first line Kelley comes the America. question Bank from of of

Shaun Kelley

on maybe to a other there's integration, like investments that everything Obviously, the the in with some launch of working Bonvoy new I'd pieces core the between you're of of the making. start SG&A. Marriott and you're lot moving

we kind a X.X% like the -- a strip our out when get SG&A. employee give growth think just could we X% some of investment, something I us and do to and X%, little we term? if wondering maybe math And think a roughly the of you're rate try in sort bit Is going just is elevated Or for long with, business about these on things based little some of the bit as model, forward? view. of right longer-term the that that level we other you dealing

Kathleen Oberg

thanks. and Yes, a no, it's good question

one reasons of the we about I AC the to venture. sure think make purchase joint wanted of it's the mention to

about If $XX to be million that you going into being being adding between $X that that comes our line to million item from of line the consolidated, of fully now from geography G&A G&A. moving think equity to our we're going

So you a change itself. growth And from talking do at we to of we in Security to to will you our full point talk long-term move need comes the more we see that growth and that But the as operating continue to in the about business in longer-term we forward. that think remove as we G&A, horizon certainly, forward think just Day. of about additional it Analyst look when the actually, we leverage about

Shaun Kelley

as of more follow-up, clarification kind a Maybe a then. just

it's -- from, guys of or -- whether the carryover anything it, let's putting some you there and onetime With call contemplating of integration any some sort that are expenses additional are the should salespeople be relates I or the breach? Just of itself number in to property help to aware the guess, XXXX. investors the, owners in it anything as from data Starwood anything

Arne Sorenson

we and to cost, The a core go the what in respect expenses that obviously, really cost in integration do dollars, specific hypotheticals that G&A in are and not But you us likely would buckets the here efficiencies the focused that like be some while we in on sense for jump number. much force continue will to making in are drive not I'd Shaun, very sales the we raised same reimbursed very much to sure way. will of event, be will and, we the across mostly with cost many future. obviously does continue place business, to business, fair, second. some and treated the aspects cyber exciting number continuing to the we are And in the And, be that transaction we've taking for think, which require invest got investments. growth

I think we will continue to be we able to than line. grow pace our G&A expenses can at a meaningfully lower top our grow

Operator

Research. question line from the next Wolfe Your of Jared comes of Shojaian

Jared Shojaian

So a talk lighter things demand in January, bit how the progressed softness that Arne, you're some that can experienced for various that's call, RevPAR. the it think, called last shutdown year-to-date think I we onetime about just you seeing environment right some really bit you about how and just talk of on in Can out of in a so about and demand September broadly you government came little reasons. and trended. the that, now Obviously, what a maybe you talk the far we're quarter little I lot that's through, can now?

Arne Sorenson

Yes.

to. us which those of my to probe coped where obviously, than think obviously, the least will glean There the balance of kind it's as about of North comments pretty I depth over otherwise. and have of way we numbers a then, system-wide And learning impacts RevPAR So specify what we unless at But let give would we this America, focus, can are. clear growth and like them of the out much of was me about in X.X%. in Fourth is can. and superficial every particularly any fourth as doubt. can to think more a couple quarter, of unpack anticipated, Obviously, you way lighter there's the I quarter sort call, and that, fourth where And both have through lot without of run XXXX. in places could we a any you a prodded quarter at try possibly are the extent we we we

Francisco fourth had which Obviously, we both called across strikes X we the the in would including very Boston markets. during significant and the hotels in XXXX, but X.X in first markets itself. zero release other United that cities QX. in strikes, The to States, San lose like caused and in very and hotels X index the those And point that us we Honolulu, script of be alone in on and of few on also out can RevPAR easily a quarter or see

they're So There's a of that of clearly in it's pretty a us. event. you pretty little impact, do because onetime impact. significant rebound bookings pending that Obviously, us, behind and is, lingering large, It's a the bit But by that particularly Hawaii, strikes on stays. behind while in have futures some that the are now impact coming still are for should quickly. fairly kind

when in look customers behavior we've in announced. reasonably on move announcement cyber November a at also script, side, too, at customer after impact we to look That, well you other certain to did see by because excluded, the is that. we put the really And think is the we the an can which one thing event date On of any was relatively easy response thing XX. not a

beyond that, of Now had looked some number impact perhaps, seemed to to other we've them have at a to quarter. us fourth the things, of some probably, logically

hard to them XXXX. a of got But out -- this it's a we've little sort Some way. separate before we over talked about -- in

used are year quarters. channels, a we to fourth that think movements quite bookings think and And principal group revenue in similarly, preferred. hotel having conceivable many our suite group lastly, inventory big the of would been That we Marriott's in have commission we some and of reservations moving catering pronounced the had while fees, prior impact that we have above-property could big yielding intermediation exposed more a in has Group the during our had which is for fees, lower first, about that, some impact, aggressive XXXX. it Starwood had of the have off as way quarter, Hotels revenue it's And probably We we teams less and the bit for QX, commissions have onto in and systems, systems moved moved competitors much had And most been course, year, mentioned, teams QX. in integration of of management. were is, the using, quite have sorts as many training question. calibrating maybe respects, done think optimistic logical budget. it's or I get in can some we we that. little ago. didn't A maybe those Ironically, and bit A of I we of But about that U.S. to steady-state than most looking a impact at. got any the we could our weaker it's when ago, to of were important that, of not things, were had all about through QX more systems that had we a quarter there, about which some XXXX. the because optimistic sort too. is part the in ago, in and expectations talk XXXX, and set quarter we we into quarter that, which for see, And have go even really, notwithstanding that we're a of look have

adjust quarter quarter years. but quarter, last XXXX RevPAR to X%, see high nearly few talked another performance typical the When we've last we XXXX. a holidays few XXXX, what RevPAR quarter, for a we X%. -- can don't at if quarterly is a sort by of we couple really and North fact, at shifting one we're quarters, think In American the look in midpoint or or in like, and hurricanes I in of the in our from in looking And or growth you Xs, see for inaugurals

quarter did feel touch more we just ago. and pretty than we so good optimistic feel, again, probably a And a

Jared Shojaian

really That's growth. guess, then, And shifting just unit helpful. to I

As the at you'll this right X I beyond the imagine more components, Day. the we I XXXX, what's way into longer you've look the dig think got units at the to growth Analyst really, this got exits. guess, you've and side But about over term?

that another are On increase about X%? the sequential how And showed thinking growth quarter. side, nice you this pipeline the

on about X.X% that think And is over way exit right X%? it the the room you then, is I do you the think have term? could longer some guess, beyond to that Or X% go to possible improve side, that? to you the on So

Arne Sorenson

a model considerable take level we'll it. of conference about analyst So detail and the you a of this you at through give

a deletion to some things is, think of continue are I obvious reasonably we'll see One behavior. couple here.

when for been right our We in we're and we'll to X% a because see for now. number think steady-state through obviously of probably of leave the But sense some again, long the that take in want assumption March. quality. hotels sort is you X.X% year of have together product we why time, business every the makes importance We to of system

year, is all likely thing the pipeline deals, of into in new terms system years' but have, the the of was, morning, whatever new called look quarter, not I precisely that deals I as that, can't than they end activity straight here, the this we future XXX,XXX-room other you talked to we've our most what And percentage include remember give In openings, XXXX, the of also the open. that I'm the think activity, incoming to all net the it about because less to XXth comforting of still of gross opened number... going another we that is, have openings have all

Kathleen Oberg

XXth.

Arne Sorenson

a over going And those next level we of have to quarter are pipeline straight of open years. predictability growth. into hotels our XXth of the that high system number

the news think March. in there's you superficial tells we'll I look But good number. together And of that, when in that kind some model that again, take you we're so through

Kathleen Oberg

the one add the is mentioned pipeline, contracts thing and of that of Arne for on strength see think, the I to we've what the be flow continues point we're that to gratified value see I'd company. rooms that coming we want I the adding the these for the think NPV we which deals by is the to of the is the particularly that only things, earlier, been as other growth of is long-term cash

Operator

comes Your Powell from of next Anthony Barclays. question the of line

Anthony Powell

Could similar program. engaged You members started data on are program new Starwood the as properties seeing commentary points that customer with the maybe call on and engagement customers those you Legacy-Marriott increase Are focus with redemptions? a some properties? your in as the positive customers? Legacy-Starwood loyalty your loyalty very Legacy-Starwood And with

Arne Sorenson

the for detail there. members. member here see more be RDX. remember system. customer we'll Legacy-Marriott and -- is did you very I and moving where with Legacy-Starwood question. translate was than and XXXX part the The the rewards loyalty take billion, were a really was data we something level issues change, frustrating and and the day volume of up through when and the while for obviously, was of good whose you we legacy of SPG wait where LDX probably latter up that to higher transferred, some call from transferred so, again, were know, Legacy-Marriott August it we well, so call -- Yes, obviously, members in the disproportionately the accurately, X latter I meaningfully there The -- and together went internally, all don't pretty if right, this, LDX -- it we impacting time The considerably and in areas in that's some too, system some hope records not part transferred. ended data that And of able X and SPG we'll good we're March

And been along. as so working we've we go that through

had their the combined on of their history, which to have portfolio because properties, level. is it's and some great the state customers, at it. and hear SPG complaints now extraordinarily in resort it's is of they've from think that significantly, partly, the the a improved Well, co-ownership of we a which taking passionate but this news program, since they change we lifestyle dramatically have when we and seen, amount about Starwood that remain even I almost Why? luxury and basis a tradition

they this going And But the well optimistic And continue by we is customers, to still those to so engagement we we're when that redemption with portfolio. quite of then. that way it. sure the planned when going to do again, this make we'd we're see through those frustrated, see we see are work and behavior strength for this behavior, work

Anthony Powell

the RevPAR any brands? those in Starwood Do changes negative you index see it. impact Got mentioned fourth quarter of due for the you some to

Arne Sorenson

made, is impact this points really -- numbers. again, efforts with And strike XX through those we've that -- Marriott America the they by in Starwood North fourth unionized. the and the to driven I basis were sort in more teased much on that done The entire is are Starwood That quarter. Yes. combined commentary the of Hotels. tended disproportionately these be portfolio, They

and were and And were these Starwood see majority which you'll you Francisco the that look of so if Hawaii Boston hotels San Hotels. markets, impacted other a and meaningful in

things one with. the start of we that that's so And

other and not off. and carefully some we've extent And data are for Legacy way, volume one have share to SPG normal some of levels, of behind get hard behind behavior from not got frustration out we've patterns data members. hand, our but The but data by we've SPG some to is -- it's bells By We sending the it have, us. behind looked some Call the is not bit does get back been wallet all they it's on while issues that getting us. way much the looked to through. us, of even it. that looked at data, this if like can bleeding sort of and, we of are a member, is working the not of We've clear, crystal been knocked It by large, that time. off alarm wait look we times are one are

think we there. making And progress good so we're

Operator

Citi. line of Smedes of comes from question next the Your Rose

Bennett Rose

bit follow on I wanted a to lifestyle hotels. your up little on and luxury commentary just

at maybe and something you're redeem than guidance their Or You're you otherwise in right about the points. more pace, now? I'm where overall improve look your are to in to you properties, are going just feel is -- growing collections, Do soft wondering, fast portfolio? is thoughts and been? to adding it in even folks your on very focused balance a obviously, you have brand need more the resorts may now you like CapEx that's

Arne Sorenson

Well...

Kathleen Oberg

to talk first talk one just about can and thing was going I then say more -- broadly. I'll Arne

CapEx $XXX particular purchases million, Just that $XXX we or that does built not the assume standpoint, single about, asset from any sheet. on talked a numbers balance to million

ballpark PIP Phoenix, But of CapEx and in a it, call which in the doing our the $XX not is CapEx the in include that before, let's we're million including does terms those in we've numbers. it as for in asset purchase, Now Sheraton numbers. are that of fundamental our talked

Arne Sorenson

space like is, if includes Yes, think XXX think, hotels I me something and away, biggest in wrong, And our industry. I'm across the luxury the far pipeline pipeline in luxury it globe. I but the correct the

to obviously those which down and know system. the And want pike continue we've the are see coming in openings, so this strengthen come We will exciting space. leadership further to our into we got units which

overwhelmingly and news, growth a deals. to we've But are the organic organic got good is our We partners which on going pike. down baked to lot and those depend the drive coming pipeline of into

Bennett Rose

on you since quarter. time on the And mean, your side, just the being are numbers? more are outlook Or from weaker cautious I bit the you you just wanted to seen seeing the reported? brought we've of ask last actually RevPAR your slightly last down you sort international -- I from given international what a you little front,

Arne Sorenson

That's bit quarter. of as each to maybe China, surprising. XXXX, the it's at year be looked got weaker over we I in not the a really both, that little think with it fair. of course

the a if as of this trade the and, caused and But China you see customers to other pretty markets destinations at and have and seem you suppose, China though individual in China, in more look key disappointing, supply a some did come other you that pretty market. think than look which That I have out in which partly at in it China team that Hainan, of is looming Florida, some is the dozen, of hotels. has optimistic it. trade we -- out, luxury recently and story, when come ago. XX think some I factors, full-service would we the part got feels where have a Sanya, Hainan, you maybe and U.S. called a -- be of China's RevPAR out Beijing China, But it's couple of I is sort they on to must war. days hopefulness extent, is I and that Shanghai bit to we to stepped today our brink in which continue from And emanations speak well. will, guess, perform China our partly and away to

cautious that have continue will pretty of a optimistic opportunities. been than we're and China growth be us while to we beginning bit So positive remain I market we think more would for at exciting a present the XXXX,

called Europe the continue in yellow out watch to go developments We Brexit. vest of all You and to demonstrations we the Paris.

had travel. started December quarter whole, on the it's with Paris time fourth impact started think certainly, strong. we a France, very demonstrations the into leisure quarter, as and the fourth and an got I By rest,

So budgeting where and be to expectations. that And the things that think places I in course also some modest process the our be had to have of more we've goes the kind into of of specific fair, fourth little us see we've it, done we all a quarter. over caused bit

So it's it, but we see conservative. bit more not a as massive shift a it's

Operator

Patrick of SunTrust. of Scholes line the from comes question next Your

Charles Scholes

growth declines in ADR for wondering I'm about North America occupancy how versus for mix think this you the or year. for rates

negative Just to would February Travel envelope, the appear you and through sort rest folks, looking X.X% the January occupancy. ADR negative mix? do you in X% it year see shaping maybe in for Smith up of of you're the back How the of occupancy at

Arne Sorenson

-- nearly think our numbers, Yes, I'm don't for that it and to on will if should the at I which of take my America, I trying XXX% fingers I But in see just would be guess see can rate-driven. here. I -- look our rate-driven when midpoint I that lay would X% nearly that, guess look be entirely January you -- North

what to this year. flat nearly probably have order something obviously, but we've it you've to demand continue like at few of what see You've have be in in States to that, in got that in the United It the kind grow or occupancy. bit means think quarters And a supply X.X%, grow and got we'll X.X% I that's might range seen last X%.

Charles Scholes

Okay. stand And with where as percentage-wise? kind overall hear Pacific and interested currently then you to IMF Asia contribution relates it be a your to IMFs, follow-up question. from I'd Europe about of

Kathleen Oberg

and this as about we typically talk international so North Yes, America.

international. So switched meaningfully in just heavier being broadly, America North being from as you heavier know, in we time, over to

see of are IMFs. its from contract not Asia almost international going to So with those that X/X Pacific, format, IMFs. is big share you now have typical actually, obviously, quite we And a international

Operator

Your from Joe comes the of of line Greff JPMorgan. next question

Joseph Greff

going My the perform segment Would question think range? second decline. outside performs? your of on you year XXXX, the segment, about you a limited-service I expect that you relates to Can lower in about North a row, what quarter talk been guess, for posted to there? RevPAR it 'XX And American you then below as you how think or end full the has

Arne Sorenson

Joe. was numbers good it. Courtyard by at to Courtyard, numbers is number Courtyard I segment the RevPAR. QX or Take at United question. to or Thank And the below One, supply States, the it's factors. you way here the look different tends this the question, extent quarterly X.X% but industry, be that really there give for concentrated that? it RevPAR of happening the positive. couple that. managed probably just probably if up are There that it's you driving implies which bit RevPAR the brand, a obviously portfolio a of X minus our example, What's system-wide we think X.X%, the franchise being a I was What's release, And think negative. for bit Yes, your a are X% of illustrating ends a things there? was you so growth in in segment either in And average don't the minus which in look press a those

obviously to mid-scale grow our supply in our as of growth, upper and attempting well. competitors are but Some upscale that is

a on market, can So of got that dynamic is And more significant bit the a segment. supply in the that same you've be depending there. it

hotels an those and -- I tend example. of use be think there gen X the to is that's couple as -- change thing our Courtyard Courtyards. second happening a Courtyard's it's hundred numbers portfolio managed The

our have make sense work those a doing order capital if of that They the that the extraordinarily are the well. were to could And can of competing they're century their increasingly, partners get in to kind absolute which they X/X these terms mid- terms that, hotels, they late so. still doesn't we But they brand-new well mostly sure against it in in construction the ultimately, and in hotels with be so leave 'XXs. need to compete against do what or in we're of to get, or that performance system. product And to themselves rocksolid that make market, to opened the younger finding

factors Courtyard so think When that AC and you the a we that. newer longest varies working don't both through have to little and of work factor the Inn, Obviously, like, the way that. some of at Residence would brand. are It we've dynamic. brands bit some have those look through And Aloft had that by the and driving continue like But I system. its we'll

Joseph Greff

Great. And talk you plans about anticipated year? then your recycling Leeny, for can this

Kathleen Oberg

have Sure. We're to certainly asset hopeful going that additional sales. we're

we know, you don't in the As actually have any predictions model.

that then reminder, Legacy-Starwood, in still Grand we've got we've down As of Americas, a hotels. hotels Legacy-Marriott including North own. obviously in them generally the seven And America. we got three CALA XX are They're the Sheraton Phoenix. Seven [indiscernible]

transaction transactions -- continues the to strong. for for for be environment the hotels So

we there And ground moved the that lease, are can in told challenging some [indiscernible], we've in from actually the have were -- cetera, make worked it times. being very assets, labor that straightforward a complexities, were is as whether into et Mother our these on more Nature's through frankly, As of whether is economy way events whether for Rio then it it's or or Starwood before, situations. terms ones you we simple front,

perspective, this to anything particular in Don't So hopeful from year. that point. this have sales we're for at asset report

Operator

the Your comes of Robin UBS. line from next Farley question of

Robin Farley

credit fees, to which card drove ask wanted nice about upside. I some

thinking that guess, much by growth how thinking have XX% guidance more be Is sustainable about driven there Just Just the this rate the or a by is. rate your for credit for is while. what about about I card rebranded sign-ups? spend would growth that you long-term year. out new once

Kathleen Oberg

what's but going be combination about talking about So you it we today, about to cards. conference, when analyst a both. has the ramp-up of talk up the going on spend. more if and the a you up, a sign for card do so having credit think appetite in will a security of normal we little on that spending at have the it cardholder it bit to I'm Obviously, bit of economy cobrand Generally, then. And will get consumer new talk cardholders a is with general about only this spend as to they there's amount

bit similar to hotel So a little a opening.

So it a really combination is of both.

Robin Farley

more follow-up I at Okay. you'll signings, be in And the about peaked in to the like, looking pipeline Analyst new your XXXX, think, issue, I then continues have at looks but from to your grow Day, of numbers the But releases. absolute talking a question what's just too. know and I that pipeline it

were -- sort just bit didn't some just you what's of about by and maybe there? to, by openings growth year? the So that unit the make that there in you're kind but of about higher it just acceleration from that the -- helped I also of end comping be last is thinking opening deletions that XXXX higher December going that the guess, a little unit up property again, guiding think in XXXX XX just what to growth thinking than longer-term driving the would kind Is

Kathleen Oberg

the were is things of post-merger signings. you pre- a of kind combination going on So at couple and in of looking remember, XXXX,

that as So what pipeline through needing 'XX the right going to deals take as to of hotels. make opening we really you we we the be were thought out and up a of those we remember, of had moved 'XX ended to sure number numbers

we falling hotels see occurring we've that as standpoint, as So continue heard it's that 'XX the delays fact and necessarily definitely us construction in But with openings actually the out we a of move pipeline. 'XX talk into from rather you've do room than to perfect about not got, comparison. grow those before,

I as we move openings accelerated our So 'XX. good seeing gross do about growth we of continued room into feel think

Operator

from of Allen comes the Thomas line of question Stanley. next Morgan Your

Thomas Allen

any commercials a the Bonvoy strategy the -- just Oscars. that behind watching bit metrics the can you've enjoyed seen? you little Can about and talk you I all campaign during So success

Arne Sorenson

that it am Yes, the less metrics question. to is name out business. that's give in there. in I drive for except actually interested don't you I eyeballs got know Obviously, eyeballs. to than we've a And good does I'm yet just what

been in we've in announced having most year Elite the we getting night go And name find for simpler. it's you powerful order of but with singularly to and then before to to these the choice public simple of have could grab. will something is another leaked to if through the it they're ended. points before now one is And you this that powerful technically, working meeting and actually by earning program. of another. some time. is nights the their requirements of we for much think longer will, chatter in what the from happening about one it, ready think that's even here, substantively, the will other redeeming it, or the for breadth coincided which And It's announce got, breadth piece step the weekend, Bonvoy transfer sort I X concentrated really they we the of about to and program space. did in last Oscars one are And enough to to most what's loyalty whether one. customers programs them number No no choice program for redeem for, obvious have happening bringing into we've longer get some launch, It's

powerful. really people do which with to business, of out hotel make come a they few and and And the folks. we've loyalty And wanted is there up Bonvoy brand funnest just a but that decided connect name. And new with it deal that a we, We decided brand whether those name bit set how trying something generally, them. we getting or a using say, chain pick to and we're program smart a at inspire new reasons, got always this of be quite forward of has not did with is one Rewards obvious to fun that a new we're for name?," we're just that, of a parts while some and albeit advisers had to with so to to SPG, by us about a feeling external came of words what coming up and of glad and a not who far folks the to been sure for will have it and internally think that great positive, big looking our is make I one just something something. call to for we've Now program "Why a for response just make I it's together that. finally you handle to more sort think program explore part up Marriott And think brand,

can't associated a I of what you course, will spend up with a the making spend know amount and what value significant We is know is compared amount money program, is done it it. past, that's in but so of significant what getting out tell of sure to it And we've people and the it. there, dollar about set it this money called year. certainly terms, promoting underway, in we'll excited years that

Operator

of Your of comes Bellisario from Baird. next Michael question the line

Michael Bellisario

Just of market to topic back the share.

I think think in I just reconcile customer said shy what last And seeing and in you business. help that patterns? us you over year, was XX% you with Could if maybe booking I mentioned you difference 'XX. you're of loyalty XX% behavior correctly, just heard of

Arne Sorenson

that. longer-term significant gratified really really share at the portfolio. reason to was a that we my across respects. thing up share program ought said see January, doing the in the about being caution exactly in I frame. number got loss of We're to didn't of that in bit I've many look XX%. QX, our the in of right By is most of mention a don't index one the me. all way, so I us earlier remarks, Starwood we great that a our in is a we RevPAR Yes, strikes And it's meaningfully and great, that absolutely about to know But the bit talked combined for something front Marriott

program when if up the across way loyalty you look continues And in think we combined. we index at were a I as to XXXX for the it perform us, RevPAR whole number -- see modestly to of portfolios both percentage we continues that will the also program the perform, to we'll There move we'll grow that index in continue are program with distributes. complexities see that system. the should and calculating room nights anticipate

contribution our we a basis, at system And a that some hotels. think count program or little also as guest One their -- growing much program we group stay, of not apples-to-apples when increased and at in the loyalty about program group pace consequence, the night and things technical our impact at, stay? get obviously for same those program going up that's least as we're stay system count the as focused do you if than first into that the numbers. an not that are a some loyalty space, a penetration fairly bit But industry in some system, do house, a on big are we're a when whole, more. the is see, you to the continue it we'll There groups as a loyalty we're room have ones the have to to you a from what obvious growing seeing signs you more is have

Operator

Grambling from Stephen line comes question next Goldman Sachs. Your of the of

Stephen Grambling

much number don't program the those the of the some how you -- more in redemptions properties? portfolio driving kind smaller think see a any see of in any through mentioned constraints would capacity about and or sense loyalty point interesting positioning loyalty has portion higher-end how grow significant if had And you you into future? previously properties. Arne, that you a stats I guess, played about higher-end of

Arne Sorenson

of as barbell. I a Yes. think a think mean, of I you this can almost bit

delivered opportunities with a portfolio You or members, their a amounts points, across hugely significant all resort a who of points, how And is in is collect who room over prototypical to members of think million road by of of by of big points, system this loyalty they're are nights, bigger program, obviously, from room in The identical. they market, going all are, redemption for XXX are family every almost near for week be the many our the about Courtyard for XX% rooms. at They advantaged where and But as a where they select attractive. a the many, the hotel advantaged is and they're bit to to ability holidays warriors free by which not huge may be those the is a however, all that higher-end nights in able a through barbell. program big, staying lifestyle earn is options. a and to benefit. going is and luxury think hotels program one where being members It of greater hotel of X.X bigger free to the portfolio million also really those summer that collecting is to a do spend important and stay in Midwestern for portfolio which

I in I well. in will, points XXXX of we redemption again, a at you saw so want is I to as that both sure and Generally, select-service think you rates growth significant total meaningful continue X% and, we high a across hotels in portfolios. the breadth choice. behavior both And And increase, we breadth think if both the points end increase think, the were to of earning choice Because out. on that huge make see advantage, redeeming and drive play there

Stephen Grambling

in program And quick seeing seeing versus the any or by you kind one new the to Great. Are of response U.S. in overseas customer follow-up. any segments? in difference change sign-ups

Arne Sorenson

spend will Laura's of Day, the No. Analyst this. that time I mean, good about talking we me chunk -- a reminding

Laura Paugh

one's have come. no to going to Otherwise,

Arne Sorenson

incredibly a granular strong Asia, best we're that their and and synergies sign-ups. of so. And we're give things more markets with customers and like is don't grateful And I distribution grow doing customers substantially. in between there membership And you good team have Alibaba bit our one we'll prominence as are and together, for. which our The our loyalty quickly growing partnership China best to we've the drive got to India course, The detail. is -- think

signing can lot really focus think new simply a time, very be million focused the probably up. business deliver you to way sign many are up, we who of we're to because of not terms up worth It's if about customers We people are, in measurable, signing us. up doing signing a same members in a it's month, are that's not while not much folks on even how who at you're will likely X.X about them people

both we're those things. through So running

cyber pretty grateful pretty and generally, were with actually continue and to is we're continued through the noisy strikes think Obviously, the for. I grateful that the the we with that pace event, growth has the was something healthy. quarter

Operator

comes of question Bernstein. next Your Beckel from line David the of

David Beckel

Had follow just wanted up about previous how feeling optimistic. -- comment you're on a more about to your

partners unleashed color get starts be the some You gave pent-up of waiting you there more or like to But do of the in good some corporate that's of once specifically, guess, with just degree I corporate uncertainty sense to marketplace travel conversations there. demand from a sort the your planners, clear up? is that

Arne Sorenson

ago, we're I to optimistic is, be released and dramatically it's gate all of out Remember, a I this to the demand that's that of there's that necessarily probably pent-up a think, think, bit about I quarter than obvious changes were a starting do not said things. more we you.

because some a the of could from or of February seen in We've As now trade I pessimism. way January bit of little of market We've partly bit itself we performing, approach partly rising a was seen the the trade market maybe end little the the sort because think even feel year, conversations, of the dynamic. and anxiety backing of you strengthen. away

road anticipating on we're, come from the one seen feels in the where Don't into And ago. wholly anxious. us when they need demand stay our model. that little and get did clients little and different is do. course, built of because than it we with customers it we've therefore, intend again bit they a environment stronger overexaggerate that's them to were is And that feels we're to before, not to steady business we It's be think our less a happy doing a a corporate hear have it better. think a we what's to it this, less comparison bit a travel. our but particularly that but I better -- quarter fearful, And they

David Beckel

sense extra ongoing want get that anything with more this structure beyond to color. comment commission guess, And Or follow-up, negotiation just for I prolonged my any specifically, Expedia. your the rate can have appreciate points I there on? deal that or Great, a wanted you negotiation? Is to just

Arne Sorenson

nothing I to No, work make say. good really can The as tell, to continue and, far teams progress. as

So time right. is speed we'll up bring to when the you

Operator

from comes Capital the next Your Markets. Wes question Golladay RBC of line of

Wesley Golladay

will marketing big on spend for majority Will for of quick credit increase Just the have card Or the one be increase? this a agreement Bonvoy. a new the owners? the fund the

Arne Sorenson

of for No XX that's and points, this -- question XX% it's yes. is new as so are the market little owners, resources owners contribute an up new of to time. has to by that from but companies where -- of charge rate program on with of what I a declined roughly, we bit who XX program, and for a plus cost XX% program, mean, program actually the about this bit dollars program actually to timeshare is the second and the the card they partners the more others And which them. than basis and and brands. little total the the oversimplification, we average, mentioned, dollars was companies end at less those support coming same And to of cost promote program credit the the the this charge-out

Kathleen Oberg

X putting programs synergies loyalty together. from got also we integration And

So organizational and benefits to got from streamlined you you've put to there. cards, owners that got, for more And also shareholders. funds together increase credit in a you've you addition and the able also we the getting consumers, remember, the structure for as were the more the for

Wesley Golladay

Okay. And one. quick one more then

that For Grand be the completed? Phoenix, when Sheraton will

Kathleen Oberg

It's underway.

balance PIPs, most next it that to you normal it like I is. could But of think take predict when hard expect could the and year. into it's exactly year this

Operator

Company. line and Kevin the question comes Cowen from of next Kopelman Your of

Kevin Kopelman

in a on They in years. after follow-up OTAs. stable were had Just prior mix in the XXXX increasing

dynamic has changed, mix in OTAs the going you XXXX trending how Given forward? for do this see now

Kathleen Oberg

get no Well, analyst conference, we'll also talk of too ahead far about so that -- to need we at the ourselves. won't security

us you've years where first loyalty us as again, work OTA-yielding doing, as doing point. the that the people we've we're Bonvoy, on percentage been channels brings the actually through increased heard think direct as work about several that which program time at to least think that it's I talk X full through all by not well the in has I

us. as indicative to it's So continuing from do consumers with And forward look our the perspective, much with have we'll think have. obviously I customers we relationship of we can to that that our book to directly as

Operator

question Your next comes Ciepiel Cleveland from line Company. Vince the Research of of

Vince Ciepiel

things out owners from there. some Hearing mixed

to would issues to point integration this Some related deal.

benefits from You have call out others reduced margin agency travel commissions.

year hearing So how back months? guess, when has as are what from hoping what up, owners evolved I a you hear the in now I to you on deal? And they are this all that roll last mean, feedback today? look And XX it you from

Arne Sorenson

a who line their or or there sets has take we customer as But and model advantage you other many food of into important the facilities. respects, all hotels invested who interested is our are our good first they substantial who system hold really X question. our know, top our hotels of customers, investing that. together behavior. of impact check area think folks or And are our for in obviously really the very It's the folks and of system. come meetings focus are is and bringing the amounts capital of a of who business driven have beverage by bottom our Starwood in one and much performance line Marriott capital obviously, That's They are does in is our their of those in recent how how And the us. customers events keenly obviously of owners. And

steadily be which be I services these delivering and now a the talked can going can are transaction the home they frequent we is to of have do our to capital both is bit sure them with procurement and and the that, for things Legacy-Starwood years growth also, about the is ultimately that doing them. into in able line to much of again, think to community travelers. we're delivering this we fair, we implemented advantage at them synergies and that by we we we generally, program our think other driving look gate cost there some I how top longer, little together Marriott if those tool And the their however, that's to been final ahead. for do of more And us but a to we're another but that we're again, But out have XXXX. take we loyalty And this and would to That, which will is we programs when are the the vehicle. right a if make rewards compete top and the Bonvoy. that news it's the going areas is in improved. at look we in cost driven in when do other most want things, been huge of want some prove powerful because really -- And of to biggest performance They say be systems we news some been because both and run. we drive that RevPAR there's hotels could things, line that through the results to thing have it the for We've merging March. since think, already, fall closed we're shared the of steadily there of morning attractive

Vince Ciepiel

X.X Great. should fees we to there fees it to X% that in consider X% non-hotel are follow-up more sounds understand the is guide. cycle I on fee with the guide, the Or on where on the and linear credit there simple do a X%? incentive is And just of bump where it a -- Or anything to what then Just the If that the and offsets trying to grows? is offset that conservatism just RevPAR X%. quick card when you better units FX, then addition in just X% the than X% going that, is addition? like

Kathleen Oberg

Sure.

we're strikes. of So would is year the of, low reality part would and you've single as you've at We've I booking was years into definitely say a looking FX XXXX, move of difficult you about it's January, lower also, bit we digits got talked it One, X had recovery, still about that growth of the in QX, that continent. to bunch wholesale at then seeing I it bookings IMFs. when a between you know. And look in things. as is IMFs you than and those Pacific of ago couple that little part we've think a And RevPAR is but in function got that a the while when of reality expectations being as were mentioned, that into Asia year-over-year had they

going as in XXXX little from a so well. And that of price a to we're pay bit

also it. Then of So of the that's impact terminated got part you've hotels.

up 'XX IMF-earning then ended with falls your of remember, have And and little you in If going that's costs, growth. terms of a bit that the talked into for on hotels. margins the bit last growth we rate we've of labor to but least, that below in about a X% with then not much actually reality 'XX, higher an your impact

Operator

from the question Instinet. next comes Your line Harry Curtis of of

Kathleen Oberg

I'm they're residential sorry. which to down we I've is function we got and a lumpy, bit one a fees, units. expect bit that to and last go more the to do actually expect is do add the little a of point of the sales timing of them the next branding that year, just

Sorry, I interrupted.

Harry Curtis

Can you me? hear

Kathleen Oberg

Yes.

Harry Curtis

okay. good, Very

an that restoration appear question purging Just contract you a would And And will Sheraton and Sheraton rooms. going as or as change And to international what brand is image? a And brand ahead, it you U.S. the going It system probably XX,XXX the what will take? you're number brand, growth? in more segment -- once then will that looking roughly to the of how to long is be well how that engine what's on have brand. is of will both? the the be the it quick brand an the question second done for fit

Arne Sorenson

I into by it no don't be it But sizes about right, -- I Harry. these I guess there's are reason All with have progress good don't average. hotels. translatable all great making shouldn't -- I questions, The have hotel be we rooms. so rooms would they these -- this. but by that should --

Sheraton or We XX have done hotels. rid -- of terms of basically, in have either we Sheratons, underway fixed the fixed getting about about renovation behavior. XXX of figure the And we fixes includes are

trying public the we've or underway of got at rooms let's internationally. about here, I'm XXX, than portfolio, what to the or we head underway in on sort looking do see, XXX total. XXX my and of be A renovation about the when and XXX separately hotels to at About in looked the it's is little and XX XXX XX% about North of -- are left So to in quickly. very about look U.S. this, about meet are the product -- space a less standards. track product I'm is math When America at

renovation renovation hotels has but done. includes not where or been where where committed that Now already the is has been yet to underway work

like out on or still XXX that. it's hotels, So something that's -- of XXX, working of leaving the XXX-ish which that portfolio, about X/X we're

when few these so went that find we on to numbers we're going there it Sheraton on. we've this portfolio quality and capital took think this now, run, the years we're the I from that massive -- of looking product got is that back better we're And average see and meaningfully than when was at we'll the a into

even to continuing are the speak. grow We we as brand

world. average increases from material scores, too -- development for the hints service bit. question Asia, a and in Your demand a see in we'll is It a we this quality is the product bit of stronger the our the rest which Sheraton that happening pipeline's is probably at partners well. and stronger But therefore, Asia product little than as it in in guest already strengthen way, the as

good So about quite we're really feeling it.

Harry Curtis

Sheraton brand So following up customers. on with the very is high identification that,

with developers? this? you do traction on gaining Are a So campaign you go to reintroduce

Arne Sorenson

little questions, more I both the as is to mean, I committed do a the different will and answer a see bit progress in be of as yes. PR ramp in think get of seen development those the the up important we I of think, the simply as terms think by completed prove need actually the of renovations based brand. delivered, portfolio, quality that bit world, to is But the little to got Well, we've customers can't on experience the more of and in pipeline. improved it markets place it we to I A are and sort customers. relaunch dangerous renovations of opposed where to

Laura Paugh

talk Yes, and we'll analyst about undoubtedly. more the at it meeting

Operator

come today from of Jefferies. question David final will Your line the Katz of

David Katz

it mix. different. What we've is of in plethora doesn't the every other out this have learned way, a cycle sort over a of that entering seen entering the or What system necessarily the we brands years cycles, is and is play

you others have growing a would there that you lot brands. brands, What the few obviously which seems just alleviate us seen are quite of quite You concerns and of launching any quickly? Or seeing? to us are terms we've population highlight for a be in help or

Arne Sorenson

is. focus XX launched question. years, And about the of of been the have don't brands business, The instance than to which supply supply. by it And -- a the you focus being I talked equation. about I -- bit a has that on turndown less weakening -- is some would dynamic growth supply what number my we driven Yes, supply be been I the in really They to it's that maybe side exacerbated, this on a may demand caused and demand before. by I'd itself. good lodging But on by depending extent, broadly. encourage the But know GDP has think in every a in a in of

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Operator

Thank the Conference you Fourth International Marriott for participating Call. in Earnings XXXX Quarter

now disconnect may lines, You and day. have a your wonderful

Marriott International (MAR) 1 Mar 192018 Q4 Earnings call transcript